Decisions under uncertainty in the COVID-19 era

Abstract

To be able to estimate an efficient and effective development over time, companies need predictability. Usually, the highest form of predictability occurs when the information media are clear, complete, and stable. In these conditions, the top decision-makers within the organizations have a very good image of the context in which the business is located, as well as on the conditions on it. In this context, managers can relatively easily define the multitude of decision options and implicitly the action scenarios on which they can decide. In reality, things are in the market in a completely different way. The information available to managers is rarely sufficient, or clear, and in most cases is unstable (in sense of time-changing). In other words, the decision taken no longer has sufficient premises to be taken in conditions of predictability, but on the contrary in volatile and unstable environments. Under these conditions, the decision under the condition of certainty turns into a real condition of uncertainty, based decisively on the appearance of probabilities in the decision-making process. The appearance of probable scenarios, instead of certain ones, makes the decision-making process move towards the decision in conditions of uncertainty. In parallel with the increase of information inaccuracy or volatility, increase also the degree of uncertainty in the decision-making options. The economic crisis accentuates the effect of information volatility and as a result, increases the level of unpredictability for decision-makers within organizations. This article addresses theoretical elements regarding the decision in conditions of certainty and conditions of uncertainty, specifying the similarities and significant differences between the two concepts. At the level of the case study, in the present paper are highlighted through a quantitative study the particularities of the managerial decision in conditions of uncertainty economic crisis from 2008-2020. This analysis is compared with data taken from a set of three studies conducted between March and April 2020 by the National Institute of Statistics, on the significant impact of the pandemic generated by COVID-19 on the Romanian economy. The conclusions highlight for each of these two analyzed crises, the perspective of the particularities of the managerial decision in conditions of uncertainty. The conclusions also highlight how managers perceive the action ways in which they can manage this uncertainty.